The Commonwealth on Public Utilities Commission, headed by lone member Viola Alepuyo, has yet to act on the petition for regulatory approval of a proposed fifth change order to CUC’s contract with Telesource, an independent power producer operating power generation facilities on Tinian.
CUC’s contract with Telesource will expire in 2020.
Alepuyo requested additional information from CUC and Georgetown Consulting Group, the commission’s regulatory consultant, and set a meeting for Saturday to discuss the petition.
In his memorandum to CUC, Dan V. Jackson of economist.com said he assumed that under the proposed change order number 5, CUC pays Telesource a monthly capacity fee of $198,000 and a per kWh charge of $0.239.
“These totals are forecast to increase at an annual average rate of 3 percent plus a 1 percent premium,” he said.
CUC is also expected to pay lube oil costs under the new contract, and the cost is assumed to be $10 per gallon with an efficiency level of 1,200 kWh per gallon, he added.
Economist.com said under the current contract, total charges are forecast at $32,084,011 over a 15-year period while under the proposed change order, it will be $64,879,976, or an increase of 102.2 percent.
During the 15-year period, the change order is forecast to result in CUC requiring an adjustment of $0.0089 to $0.0129 per kWh for all kWh sold, economist.com said.
Among its other findings:
• For a residential ratepayer using 500 kWh per month, the change order will result in an increase of $4.43 per month, or $53.20 for the first year. Over the 15-year period, the total additional cost to a user of 500 kWh is $975.82
• For a residential ratepayer using 1,000 kWh per month, it will result in an increase of $8.87 per month, or $106.40 for the first year. Over 15-year period, the total additional cost to a user of 1,000 kWh is $1,951.64
Georgetown, in its own analysis and supplemental information, states that if the change order is approved by the commission, every customer served by CUC, whether from Tinian, Saipan or Rota, will ultimately experience an increase in their electric rates.
“While it has been argued that there is a provision in change order number 5 favorable to CUC that could potentially reduce to five years the term of the Telesource agreement, we believe that this provision is totally not realistic,” Georgetown said.
CUC, it added, would be required to demonstrate that fossil generation is no longer needed on Tinian — “a herculean effort given the economic viability of today’s alternative energy technologies, which is a totally unrealistic situation….”
Moreover, the commission “should be cognizant of the impact that change order number 5 will have on an individual consumer, [which is] the most critical impact,” Georgetown said.
Based on its analysis, Georgetown said for each 1,000 kWh per month of consumption, consumers would see a $6.92 increase in their monthly bill in the first year of operation.
That amount, according to Georgetown, would increase to $14.05 per month by the 15th year of operation.
Georgetown said under the change order the amount CUC would pay Telesource would be over $3.5 million per year, an increase of $1.5 million.
